The Brazilian government has already announced an initial contribution of US$1 billion and expects other countries to announce their contributions during the conference; Among the main potential donors are the USA and Germany
Brazil is betting big on COP-30, which will be held in Belém (PA), next month, by presenting the Tropical Forests Forever Fund – TFFF) as one of the country’s main deliverables during the conference. The initiative, considered the largest multilateral climate action ever led by a country from the Global South, seeks to raise US$25 billion in international donations to finance the preservation of tropical forests.
The Brazilian government has already announced an initial contribution of US$1 billion, and expects other countries to announce their contributions during the conference. Among the main potential donors are Germany, Norway, the United Kingdom, France, the United Arab Emirates and the United States, in addition to ongoing conversations with Japan, China and Singapore.
After reaching the initial target of US$25 billion in public donations, Brazil intends to attract up to US$100 billion from the private sector through the issuance of green debentures.
In total, 70 countries with tropical forests could benefit, including Brazil, Colombia, Ghana, Indonesia, Malaysia and the Republic of Congo, which actively participate in the discussions. Peru and Bolivia also expressed interest in joining the initiative. The fund will bring together nations from the three largest forest basins on the planet: the Amazon, Congo, in Africa, and Borneo, in Asia.
Fund to keep forests standing
Inspired by the Amazon Fund, the TFFF aims to pay countries for results in reducing deforestation, allocating resources directly to preservation actions and local communities.
The model foresees payments of US$4 per hectare preserved and penalties of up to US$400 per hectare deforested, which means that countries that exceed their forest destruction limits may no longer receive any payments.
The challenge for resource rents
The fund’s resources will be invested in international fixed income securities, prioritizing securities from emerging countries, which offer higher yields, and also securities from companies in Europe and the United States, considered safe and profitable. The expectation is to obtain returns of 7% to 8% per year, guaranteeing a net return of around 2% to 3% after operating costs.
The World Bank will be the fund’s financial administrator, responsible for managing resources, making payments to eligible countries and overseeing performance reports. Each nation must demonstrate, with satellite images, the maintenance of its forest areas and the use of resources in sustainable actions.
The executive director representing the World Bank in Brazil, Marcos Vinicius Chiliatto, highlighted Brazil’s leadership role in the global environmental agenda. “It is a global public good that Brazil is promoting, and the World Bank is very proud to be a partner in this initiative,” he stated.
